Slow 5G SA Progress Holding Back Public Telco Cloud

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As the rollout of 5G SA happens much slower than expected, Dell’Oro have decided to lower their growth forecast for the revenues 5G SA workloads on their public cloud will be. The research firm expects cumulative revenue to manage $5.4 billion by 2027. This would represent a five-year compound annual growth rate of 65%.

While that’s still an impressive number to reach at all, it’s significantly lower than the previous forecast. In August of last year, Dell’Oro predicted that cumulative revenues could show a CAGR of a huge 88% within the five years up to 2026, when it would hit $4.6 billion.

Dell’Oro research director Dave Bolan made a statement on the matter; ”The forecast has been reduced due to the slow migration to 5G SA by mobile network operators for their eMMB (enhanced mobile broadband) networks and by enterprises for their 5G SA private wireless networks.”

This is true, as only 36 operators had been reported to have launched 5G SA by the end of the second quarter. That includes only one extra launch since the end of the first quarter. As well as this, the number of operators investing in 5G SA has remained wholly the same in the second quarter at only 115.

The flag is still being flown for the telco public cloud by Dish, but not too many telcos seemed to follow on.

In terms of enterprises and private 5G SA networks, there’s no rush either.

Bolan noted in his statement that, ”Some enterprise networks are commercially deployed, but most are long-term proofs-of-concept or field trials, lasting as long as a few years.”

”As a result, we forecast that HCPs such as Amazon Web Services, Google Cloud, and Microsoft Azure will capture a cumulative 6% of the market revenues over the next 5 years by hosting 5G workloads on their respective public clouds,” he said.

Another industry biding their time will be hyperscalers, who will have to wait to crack the multi-access edge compute (MEC) market.

As stated by Dell’Oro, HCPs should expect to generate cumulative revenues of $1.3 billion from the MEC market over the next 5 years.

”The anticipated CAGR for the edge of the public cloud market is 86%, making it the highest growth segment for HCPs. The interest by the HCPs also extends to the IMS core and the virtualised radio access network (vRAN),” said Bolan.

Again, that is still impressive growth, but $1.3 billion would hardly make a wave when up against the broader MEC or mobile core network (MCN) market. Dell’Oro predicted that these broader markets would reach $50 billion by 2027.

Potential for hyperscalers to tap into both the 5G SA and MEC markets is high, which offers some encouragement, but it currently looks as if they wont be amounting to too much in the near future.

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